September 28, 2011

United Copper Industries Change in Ownership – Frequently Asked Questions

• What has occurred?  On September 28, 2011, KPS Capital Partners, LP (“KPS”) acquired the assets of United Copper Industries. We will continue to operate as normal under the name of United Copper Industries.


• Will UCI continue to grow?  Yes, UCI will continue to grow and prosper by properly executing our current industry leadership strategy, focusing on serving our customers and investing in our employees and operations. UCI will hire additional employees to support our growth.


• Who is KPS?  KPS Capital Partners, LP (“KPS”) is a large private equity fund, with over $2.9 billion in assets, focused on constructive investing in manufacturing businesses around the world. KPS acquires companies facing a range of circumstances, including corporate carve-outs, turnarounds and businesses in transition. Our situation comes under the corporate “carve out” category, which occurs when a company such as IUSA decides to sell certain businesses for strategic reasons. KPS creates value through operational performance improvement and execution of strategic growth initiatives. UCI will have a strong balance sheet to support our growth and facilitate acquisitions. The managing partners of KPS have worked together for two decades and developed a very successful investing track record. Companies currently owned by KPS include Motor Coach Industries, Global Brass & Copper, HHI Group Holdings, North American Breweries, Waterford Wedgwood Royal Doulton, and International Equipment Solutions.


• Why did KPS decide to acquire UCI?  KPS sees UCI as well-positioned for profitable growth. They have been impressed by our ability to react to the severe downturn in 2008-2010 and then to perform strongly during the past 12 months while the broader market began to recover. KPS will support UCI as we undertake initiatives to accelerate growth, both organically and through acquisitions, and to take advantage of the eventual market recovery. They also recognize the value of our excellent market reputation, strong customer relationships, and most of all, the people that have built UCI into an industry leader.


• What does KPS expect of UCI?  KPS’s goal for UCI will be to accelerate our growth in earnings, through organic growth initiatives, acquisitions and an eventual recovery in commercial and residential construction. UCI will concentrate on organic growth initiatives that strengthen our position as an industry leader, continuing to fulfill our promise to customers, as well as accelerating continuous improvement programs and capital projects to improve quality, productivity and marketplace responsiveness.


• Why did IUSA decide to sell UCI?  IUSA made a strategic decision to exit the building wire industry in the USA and Canada and focus their attention in other areas.


• How does this announcement change what I do?  Our business objectives will not change and we will continue to work as we have in the past—“business as usual”. This announcement will not impact your day to day activities or the work and contributions that you are making towards helping UCI achieve its objectives. It is important that we welcome our new owners and most importantly, keep focused on working safely and productively. Please remember that our customers are counting on us to live up to our Customer Promise of providing Premium Quality Products and Excellent Customer Service at Fair Competitive Prices.


• Will our pay and benefits programs change?  We have no plans to change our compensation and benefits plans as a result of the change in ownership. As part of our business philosophy, we will continue to seek ways and programs that enhance our compensation and benefits plans. Later this year, we will start open enrollment for 2012 benefits.


• Will our 401(k) program change?  We will continue our 401(k) plan under our current administrator, Ascensus. Contributions currently in the UCI program will simply be rolled over into a new program. You will continue to access your account as you have in the past. The current company matching program will continue and all employees are encouraged to participate in this valuable benefit to build retirement funds on a pre-tax basis.


• Will there be management changes?  KPS has voiced a great deal of confidence in the UCI leadership team and does not plan any changes.


• How will this impact our customers?  This purchase will be positive for our customers because KPS wants to invest in the profitable growth of UCI. Our strategy is centered on delivering premium value to our customers as expressed in our Customer Promise of Providing Premium Quality Products and Excellent Customer Service at Fair Competitive Prices. As long as we drive continuous improvements in those areas then our customers will continue to support UCI with their business.


• What should we tell customers?  Communication with customers will continue to be the responsibility of our sales and marketing teams. Our positive message is that it is “business as usual” and “our future looks bright”. With financial backing from KPS, we will aggressively pursue our industry leadership strategy.


• How does this affect our supplier partners?  This will be a positive step to our strong supplier partners as they’ll share in our future success. Our Operations Team will be meeting with our suppliers to assure then that UCI will continue to work with them on quality and cost improvement initiatives. We will continue to treat suppliers as our business partners, honor all existing contracts and continue to conduct business under current terms and conditions.


• What if I have more questions?  Please go to your supervisor, HR, or me.

Andy Blanchard
President and CEO